Chapter- II: Taxes on vehicles - CAG's website · The Bihar and Orissa Public Demand and Recovery...

Chapter- II: Taxes on vehicles

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CHAPTER II: TAXES ON VEHICLES

2.1 Tax administration

The levy and collection of taxes on vehicles in the State is governed by the

provisions of Motor Vehicles (MV) Act, 1988, Central Motor Vehicles (CMV)

Rules, 1989, Bihar Motor Vehicle Taxation (BMVT) Act, 1994 and BMVT

Rules, 1994. It is administered by the Principal Secretary, Transport

Department at the Government level and by the State Transport Commissioner

(STC) at the apex level of the Department. In performance of his duties, the

STC is assisted by two Joint State Transport Commissioners at the

headquarters. The State is divided into nine Regional Transport Authorities1

(RTAs) and 38 District Transport Offices. They are assisted by the Motor

Vehicle Inspectors (MVIs) in discharging their duties. The main function of

the RTAs is to issue road permits to the vehicles and the responsibility of

registration of motor vehicles, levy and collection of fees and taxes and grant

of driving licences are assigned to the District Transport Officers (DTOs) in

the State.

2.2 Internal Audit

The Internal Audit wing of any department is a special vehicle of the internal

control mechanism and is generally defined as the control of all controls to

enable an organisation to assure itself that the prescribed systems are

functioning reasonably well.

There is an internal audit wing called Finance (Audit), which works under the

Finance Department and internal audit of the different offices of the

Government is conducted on the basis of requisitions received from the

Administrative Department. The Chief Controller of Accounts can also select

units for internal audit on availability of audit team.

We are yet to receive the information regarding requisitions received from the

Administrative Department and number of units selected for internal audit by

the Finance Department (October 2016).

2.3 Results of audit

There are 49 auditable units under Transport Department, of which 35 were

planned for audit during 2015-16 and we have conducted audit of 33 units

(DTOs: 29, RTAs: 2, STC: 1 and PSU: 1) during the year. We found short

realisation, loss of revenue and other irregularities involving ` 94.57 crore in

299 cases which fall under the following categories as detailed in Table-2.1.

1 Bhagalpur, Darbhanga, Gaya, Katihar, Madhubani, Muzaffarpur, Patna, Purnea and

Vaishali.

Audit Report (Revenue Sector) for the year ended 31 March 2016

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Table-2.1

Results of audit (` ` ` ` in crore) Sl. No. Categories No. of cases Amount

1. Performance Audit of ‘Levy and collection of

motor vehicle tax’

1 39.15

2. One time tax from newly registered Maxi/cabs

not realised

37 8.79

3. One time tax due to pending registration of

tractor (Commercial) not realised

59 7.96

4. Motor vehicles taxes not realised 27 4.56

5. One time tax on three wheelers not realised 35 3.74

6. Trade certificate fee not realised 23 2.29

7. Other cases 117 28.08

Total 298 55.42

Grand Total 299 94.57

The results of Audit in respect of our audit findings on taxes on motor vehicles

during 2015-16 is depicted in the following Chart-2.1:

Chart-2.1

Results of audit (` ` ` ` 94.57 crore) (`̀̀̀ in crore)

Out of the cases mentioned above, the Department accepted short levy, short

realisation and other deficiencies of ` 7.22 crore in 11 cases, of which four

cases involving ` 7.07 crore were pointed out during the course of the year

and the rest in earlier years.

Audit findings of the Performance audit of ‘Levy and collection of motor

vehicle tax’ and a few other illustrative audit observations involving ` 48.57

crore are mentioned in the succeeding paragraphs.


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2.4 Performance Audit of 'Levy and Collection of Motor Vehicle

Tax'

Highlights

More than 80 per cent of people living in urban areas are exposed to air

quality levels that exceed the limits specified by World Health Organisation

(WHO). A survey conducted by WHO based on Central Pollution Control

Board (CPCB) reports found that Patna is the sixth most polluted city in the

world with an annual averaged ultrafine particle level of 2.5 or less microns at

149 (year 2013) and level of particles of 10 and above microns at 167 (year

2012). The Indira Gandhi Science Centre Planetarium, Patna under CPCB

declared (16 December 2016) the air quality of the City as ‘Most Unhealthy’

with Respirable Suspended Particulate Matter (RSPM) at 280 against a

permissible limit of 60 microgram per cubic metre (µg/m3). Guidelines for

Ambient Air Quality Monitoring issued by CPCB states that one of the main

sources of RSPM is vehicular emission. Audit observed that Patna witnessed a

steep increase in number of vehicles from 2.34 lakh as on 1 April 2011 to 6.74

lakh as on 31 March 2016. This made it clear that the exponential increase in

number of vehicles in Patna played an important role in the rise in pollution

level in the City.

(Paragraph: 2.4.9.1)

Though the vehicular pollution levels in the City has increased as per data

maintained by CPCB, scrutiny of records in STC, Bihar, Patna, revealed that

the office was not maintaining the database of pollution testing stations in the

City as well as in the State. As a result, the Department could not monitor the

standards of pollution testing stations to ensure that the tests conducted by

them are authentic and only those vehicles which were certified as 'Pollution

under Control' (PUC) after following due procedure were allowed to ply in the

State. Absence of any control by STC over the functioning of the pollution

testing stations may be a reason for the increased pollution levels in Patna.

(Paragraph: 2.4.9.2)

There were 35 cases of fictitious transactions (in district transport office, West

Champaran) and 81 cases of irregular cancellation of money receipts (in five

district transport offices) due to absence of validation checks and proper

monitoring. The scale of fictitious transactions/malpractices in handling

money receipts rendered the integrity and security of VAHAN database

doubtful.

(Paragraph: 2.4.8)

Due to absence of validation checks in registration module of VAHAN

software and lack of inter-connectivity amongst the district transport offices,

132 vehicles were registered at reduced sale value. Further, 52 vehicles were

registered in other districts after the actual date of purchase and on reduced

sale amount. There was delivery of 19,447 vehicles without assigning

temporary registration number and 32,797 commercial tractors were registered

without trailers. These irregularities resulted in short realisation of revenue of

` 30.90 crore.

(Paragraph: 2.4.10)


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In district transport office, West Champaran, driving licences were issued to

3,188 applicants without conducting test of competency to drive motor

vehicle. However, SARATHI database indicated that the licences were issued

after passing the test which indicates that the database was tampered with.

Issue of licences in such a way is also fraught with risks of accident and

fatalities.

(Paragraph: 2.4.11)

As the Department failed to inter-link the database of offices of the District

Transport Officers with that of offices of Regional Transport Authorities, the

plying of three wheelers, tractor-trailer combination and buses of educational

institutions without valid permit remained undetected.

(Paragraph: 2.4.12)

An amount of ` 10.10 crore collected as fees was remitted to Government

account with a delay ranging from two days to 10 months in contravention of

the provision of the Bihar Financial Rules. Further, 596 bank drafts received

from different States/Regional Transport Authorities as permit fee were not

encashed during their validity period.

(Paragraph: 2.4.14)

2.4.1 Introduction

Taxes on motor vehicles are levied and collected in accordance with the

provisions of the Bihar Motor Vehicles Taxation (BMVT) Act, 1994 and the

Bihar Motor Vehicles Taxation (BMVT) Rules, 1994. Fee for licences,

registration of vehicles, certificate of fitness, permit and fines for

compounding of offences are levied and collected under the provisions of the

Motor Vehicles (MV), Act 1988, Central Motor Vehicles (CMV) Rules,

1989 and notifications issued thereunder.

The Government of India, in order to have a National Register of registered

motor vehicles and driving licences and to provide data to the Centre and

State security agencies, issued directives to all State Governments to adopt

'VAHAN,2' and 'SARATHI

3' softwares. The softwares were developed by the

National Informatics Centre (NIC), New Delhi. Apart from the National

Register, these softwares were also intended to help develop the State

Register of motor vehicles and licences. The functions of the Department

had been computerised using these two computer application software since

May 2008 and February 2009 respectively. The operating platform was

Windows 2000 for server and Windows XP for all clients. The different

modules in the VAHAN software were Vehicle registration, Renewal of

vehicle registration, Transfer of ownership, Change of address, Removal of

hypothecation, Permit and Taxes etc. and that of SARATHI were Issuance

and renewal of driving licences.

2 An application developed for registration of vehicles and road tax clearance.

3 An application developed for issue of various licences.


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Principal Secretary

State Transport Commissioner

Nine Regional Transport Authorities (RTAs)

controlled by the Secretaries of the

RTAs

38 District Transport Officers assisted by Motor vehicle

Inspectors

Two Joint Transport

Commissioners at headquarters level

2.4.2 Organisational set up

At the Government level the Department is administered by the Principal

Secretary while the State Transport Commissioner (STC) Bihar is the head of

the Department and responsible for the administration of the Acts and Rules.

He is assisted by two Joint State Transport Commissioners at the headquarters.

The State has been divided into nine regions and 38 districts which are

controlled by the Secretaries of the Regional Transport Authorities (RTAs)

and the District Transport Officers (DTO) respectively. DTOs are assisted by

the Motor Vehicle Inspectors (MVIs) in discharging their duties. The

organisational set-up of the Department is given in the following Chart-2.2:

Chart-2.2

Organisational set up

2.4.3 Audit objectives

The objectives of this Performance Audit was to ascertain whether:

� the provisions of the Acts and rules made thereunder and notifications

issued from time to time for assessment, levy and collection of the motor

vehicles taxes, fees and fines etc., were being implemented efficiently and

effectively; and

� the Department had an effective and adequate internal control

mechanism to levy and collect revenues and its remittance into Government

Account.


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2.4.4 Audit Criteria

The Audit criteria for the Performance Audit were derived from the following

sources:

� The Motor Vehicles Act, 1988;

� The Central Motor Vehicles Rules, 1989;

� The Bihar Motor Vehicles Taxation Act, 1994;

� The Bihar Motor Vehicles Taxation Rules, 1994;

� The Bihar Motor Vehicles Rules, 1992;

� Notifications, circulars, executive and departmental orders and

instruction issued by the Department from time to time;

� The Bihar and Orissa Public Demand and Recovery Act, 1914;

� Bihar Budget Procedure; and

� Bihar Financial Rules.

2.4.5 Audit Scope and methodology

Performance Audit was conducted during March to July 2016 covering the

period from 2011-12 to 2015-16. Ten4 out of 38 district transport offices

including three check posts5 and two (Muzaffarpur and Purnea) out of nine

RTAs were sampled randomly selected on the basis of revenue generated by

the districts for the period from 2010-11 to 2014-15 by using Interactive Data

Extraction Analysis (IDEA) Software. Two district transport offices (Kaimur

and Saharsa) were selected at the behest of the Department. Besides, office of

the STC, being controlling office at the headquarter level, was also selected

for the purpose of the performance audit.

Audit methodology included conducting field visits for examination of

records, collection of data from the Department, issue of audit memoranda,

questionnaires and obtaining replies from audited entities to arrive at the audit

conclusion. An Entry Conference was held on 29 March 2016 with the State

Transport Commissioner wherein scope of audit, methodology and audit

objectives including sampling technique adopted were explained to the

Department. An exit conference was held on 6 October 2016 with the State

Transport Commissioner in which the audit findings were discussed. Their

comments have suitably been incorporated in the relevant paragraphs.

2.4.6 Acknowledgement

Indian Audit and Accounts Department acknowledges the co-operation of the

Transport Department in providing necessary information and records for

audit.

2.4.7 Trend of Revenue

As per Rule 54 of the Bihar Budget Procedure (BBP) the estimates of revenue

and receipts should show the amounts expected to be realised within the year.

In estimating fixed revenue for the ensuing year, the calculation should be

based upon the actual demand, including any arrears due for past years and the

4 Begusarai, Kishanganj, Katihar, Gaya, Nalanda, Patna, Purnea, Rohtas, Vaishali and

West Champaran. 5 Dalkhola (Purnea ), Dobhi (Gaya) and Karamnasha (Kaimur).


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probabilities of their realisation during the year. The arrears and current

demands should be shown separately and reasons given if full realisation

cannot be expected. In the case of fluctuating revenue, the estimate should be

based upon a comparison of the last three years receipts.

Further, Rule 37 of the Bihar Financial Rules stipulates that it is the

responsibility of the departmental officers to see that all sums due to the

Government are regularly and promptly assessed, realised and duly credited in

the Public Account and compare them with the records of the Accountant

General (A&E) to see the amounts as realised have been duly credited in the

Public Account.

The details of Budget Estimates (BE) and actual receipts (as per Finance

Account) for the year 2011-12 to 2015-16 are mentioned in Table-2.2 below:

Table-2.2

Trend of Revenue ((((` ` ` ` in crore)

Year

Budget

Estimates

Receipts

as per

Finance

Accounts

Receipts as

per

Department

Variation

between BEs

and Actual

Receipts

(3-2)

Percentage

of

variation

Variation

between

Actual

Receipts as

per Finance

Accounts

and as

furnished

by the

Department

(3-4)

1 2 3 4 5 6 7

2011-12 537.00 569.13 557.48 32.13 5.98 11.65

2012-13 644.40 673.39 669.30 28.99 4.50 4.09

2013-14 800.00 837.48 835.51 37.48 4.68 1.97

2014-15 1000.00 963.56 966.46 (-) 36.44 (-) 3.64 (-) 2.90

2015-16 1200.00 1081.22 1070.97 (-)118.78 (-) 9.90 (-)10.25

(Source: Information furnished by the Department and Finance Accounts, Government of Bihar.)

The budget estimates vis-a-vis actual receipts (as per Finance Accounts) for

the year 2011-12 to 2015-16 is depicted in the following Chart-2.3:


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Chart- 2.3

Trend of revenue

The above table indicates that actual receipts was more than budget estimate

during 2011-12 to 2013-14. However, actual receipts decreased by 9.90

per cent over the budget estimates during the year 2015-16, which is a cause

of concern and needs to be analysed by the Department. Further, the difference

between receipts as per the Finance account and those furnished by the

Department ranged between ` (-) 10.25 crore and ` 11.65 crore during

2011-12 to 2015-16, which indicates that timely reconciliation was not done.

The Department did not reconcile revenue collection figure even after being

intimated by the AG (A&E) in March 2016. We further observed that on-line

facility is provided by the Department in all the selected district transport

offices for collection of taxes and its accounting. Despite that most of the

beneficiary are paying their taxes/fees manually on the counter of district

transport offices.

On this being pointed out, the Department stated (October 2016) that receipts

in the year 2015-16 decreased due to engagement of officers in the Assembly

Election.

Recommendation-1: The Government/Department should ensure

periodic reconciliation of the revenue collection figures with the accounts

of the Accountant General (A&E) to ascertain the correct accountal of

realised revenue and credit to treasury.

Audit findings

During test-check of the records in the offices of the DTOs, RTAs and STC,

we observed a number of irregularities/deficiencies which are discussed in the

succeeding paragraphs:

2.4.8 Defalcation of Government revenue

Due to absence of validation checks and proper monitoring, there were 35

cases of fictitious transactions (in district transport office, West

Champaran) and 81 cases of irregular cancellation of money receipts (in

five district transport offices). These irregularities resulted in defalcation

of Government revenue of ` ` ` ` 20.63 lakh.

0

200

400

600

800

1000

1200

1400

2011-12 2012-13 2013-14 2014-15 2015-16

Budget Estimates

actual Receipt


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Rule 37 of the Bihar Financial Rules provides that all transactions must

be brought into account without delay and money received should be duly

credited into the Government account.

• During cross-verification of manual cash book6 with the daily cash

report generated by audit from the VAHAN software in the test-checked

district transport offices, we observed (May 2016) that in the district

transport office, West Champaran, the amount shown in generated copy

of the daily cash report of VAHAN database was higher than the amount

entered in the manual cash book of a particular day. We further observed

that in daily cash report generated by audit for the period 30 September

2014 to 4 May 2016, 35 fictitious transactions were made after the date of

actual transactions. Out of these transactions, two transactions were

found recorded on future date i.e. on 8 December 2016. This resulted in

loss of revenue of ` ` ` ` 11.41 lakh as detailed in Annexure-I.

• During data analysis of VAHAN software in selected 12 district

transport offices, we observed in five district transport offices7 that tax of

` ` ` ` 19.20 lakh was initially collected from 81 vehicles during the period

May 2011 to February 2016, but subsequently their receipts were found

cancelled. Against which, in case of 63 cancelled receipts of `̀̀̀ 16.47 lakh,

fresh receipts of reduced amount of `̀̀̀ 9.98 lakh were issued and in case of

remaining 18 cancelled receipts involving `̀̀̀ 2.73 lakh, no fresh receipts

were found generated but taxes (quarterly/one time tax) in case of all 81

vehicles in the VAHAN database were shown cleared and accounted

for/smart card issued. This resulted in loss of revenue amounting to `̀̀̀ 9.22

lakh (`̀̀̀ 19.20 lakh - `̀̀̀ 9.98 lakh) as detailed in Annexure-II.

The scale of fictitious transactions/malpractices in handling money

receipts rendered the integrity and security of VAHAN database doubtful.

On this being pointed out, the Department stated (October 2016) that FIR

had been lodged (May 2016) and the employees concerned were arrested

and sent to jail in West Champaran. The Department further stated

(August 2016) that comprehensive directives were issued to all DTOs to

monitor and safeguard the VAHAN and SARATHI database to prevent

such malpractices.


biometric password policy and necessary validation checks in the VAHAN

and SARATHI software to ensure data integrity and server security.

6 In the manual cash book the amount is recorded as per the cash report generated on

the date of transaction. 7 Katihar, Kaimur, Purnea, Saharsa and West Champaran.


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2.4.9 Vehicular pollution and testing of emission levels

2.4.9.1 Rise in vehicular pollution in Patna

Exponential increase in number of vehicles played an important role in

rise of pollution level in Patna.

More than 80 per cent of people living in urban areas are exposed to air

quality levels that exceed the limits specified by World Health Organisation

(WHO). A survey conducted by WHO based on Central Pollution Control

Board (CPCB) reports found that Patna is the sixth most polluted city in the

world with an annual averaged ultrafine particle level of 2.5 or less microns at

149 (year 2013) and level of particles of 10 and above microns at 167 (year

2012). The Indira Gandhi Science Centre Planetarium, Patna under CPCB

declared (16 December 2016) the air quality of the City as ‘Most Unhealthy’

with Respirable Suspended Particulate Matter (RSPM) at 280 against a

permissible limit of 60 microgram per cubic metre (µg/m3).

Guidelines for Ambient Air Quality Monitoring issued by CPCB states that

one of the main sources of RSPM is vehicular emission. Audit observed that

Patna witnessed a steep increase in number of vehicles from 2.34 lakh as on 1

April 2011 to 6.74 lakh as on 31 March 2016. This made it clear that the

exponential increase in number of vehicles in Patna played an important role

in the rise in pollution level in the City.

2.4.9.2 Absence of State-wise database of pollution testing stations

State Transport Commissioner did not maintain the State-wise database

of pollution testing stations and ‘Pollution under Control’ certificate

issued by them.

Though the vehicular pollution levels in the City has increased as per data

maintained by CPCB, scrutiny of records in STC, Bihar, Patna, revealed that

the office was not maintaining the database of pollution testing stations in the

City as well as in the State. As a result, the Department could not monitor the

standards of pollution testing stations to ensure that the tests conducted by

them are authentic and only those vehicles which were certified as 'Pollution

under Control' (PUC) after following due procedure were allowed to ply in the

State. Absence of any control by STC over the functioning of the pollution

testing stations may be a reason for the increased pollution levels in Patna.


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2.4.9.3 Pollution testing equipment not utilised

District Transport Officers/Motor Vehicle Inspectors did not conduct test

to check that motor vehicles met prescribed emission and pollution

control norms, despite the fact that they were equipped with necessary

equipment.

During scrutiny of pollution register in the office of STC, we observed (April

2016) that gas analyser/smoke meter supplied by the Government of India

were issued (between March 2009 and June 2012) to eight DTOs8 and 22

MVIs to check that motor vehicles met emission and pollution control norms

and issue the PUC certificates by charging the prescribed fee9. We however

observed that no test was conducted to check that motor vehicles met

prescribed emission and pollution control norms by the DTOs/MVIs, despite

these enforcing agencies being equipped with necessary equipment. This was

because of the shortage of trained staff. Thus, the gas analyser/smoke meter

supplied by Government of India were not utilised and kept idle.

On this being pointed out, the Department stated (October 2016) that

information is being sought for from concerned officials.

2.4.9.4 Loss of renewal fee

Licences of 106 pollution testing stations were not renewed as the STC did

not maintain the State-wise database of pollution testing stations.

Consequently, renewal fee of `̀̀̀ 11.30 lakh was not realised.

As per sub rule 6 (i) of Rule 163 E of the Bihar Motor Vehicle (BMV) Rules,

1992, a licence granted to pollution testing station shall remain valid for a

period of two years and may be renewed for a further period of two years on

payment of renewal fee of ` 5000.

As the STC failed to maintain the database of all the pollution testing stations

in the State, we observed that out of 256 pollution testing stations recorded in

the pollution register, entries relating to renewal of licences of 106 pollution

testing stations were not available between July 2007 and January 2016. This

resulted in loss of renewal fee of ` 11.30 lakh.

2.4.9.5 Returns not submitted by the pollution testing stations

Returns regarding number of vehicles tested and revenue collected not

submitted by the pollution testing stations.

Sub-rule (8) (b) of Rule 163 E of the BMV Rules, 1992 provides that pollution

testing station shall submit monthly return by 5th

day of the succeeding month

to the licensing authority, furnishing information as to the number of vehicle

inspected, result of inspection and the number of PUC issued.

During scrutiny of pollution register in STC, Bihar, Patna, we observed that

monthly return was not being submitted by the pollution testing stations. In the

absence of return, the number of vehicle inspected, revenue collected and

8 Bhagalpur, Darbhanga, Gaya, Munger, Muzaffarpur, Purnea, Saharsa and Saran.

9 The prescribed fee for issue of PUC certificate is ` 30 for two-wheelers/auto-

rickshaw, ` 50 for light motor vehicles and ` 75 for other vehicles.


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deposited to the Government account by these stations could not be

ascertained.

Recommendation-3: The Government/Department should maintain a

State-wise database of pollution testing stations. It should also ensure that

the tests conducted by them are authentic and due procedure has been

followed by the stations while issuing the certificate. This would enable

the Department to control the vehicular pollution in Patna and in the

State.

2.4.10 Registration of vehicles

Due to absence of validation checks in registration module of VAHAN software

and lack of inter-connectivity amongst the district transport offices, 132

vehicles were registered at reduced sale value. Further, 52 vehicles were

registered in other districts after the actual date of purchase and on reduced sale

amount. There was delivery of 19,447 vehicles without assigning temporary

registration number and 32,797 commercial tractors were registered without

trailers. These irregularities resulted in short realisation of revenue of ` 30.90

crore as detailed below:

2.4.10.1 Registration of vehicles on reduced sale amount

Registration of 132 personalised vehicles on reduced sale amount resulted

in loss of revenue of `̀̀̀ 13.75 lakh.

Under Section 7(1) of the Bihar Motor Vehicle Taxation (BMVT) Act, 1994,

as amended by Finance Act, 2011(with effect from 1st April 2011), one-time

tax (OTT) at the rate of five per cent of the cost of vehicle excluding sales tax

for the whole life of the vehicle shall be levied at the time of registration on

personalised vehicles. Further, Bihar Finance Act, 2012 (Bihar Act 6, 2012)

revised the rate of OTT at the rate of six per cent for vehicles costing upto

rupees four lakh and seven per cent for vehicles costing more than rupees four

lakh excluding sales tax. The rate of tax was again revised to seven per cent

from 1 April 2013 for all personalised vehicles. Further, Transport Department

issued directive in July 2013 to collect tax after verifying the sale amount

mentioned in the sale certificate (Form-21) with the cost of vehicle provided

by the dealer to DTOs.

During cross-verification of sale amount of vehicles as entered in the VAHAN

database with actual cost of vehicles, we observed in three10

out of 12

test-checked district transport offices that sale amount shown in VAHAN database

was less than the actual cost of the vehicle11

in 132 personalised vehicles. Since

there was no inter-connectivity in the VAHAN software of concerned

10

Katihar, Purnea and Saharsa. 11

The sale price of motorcycle shown in database was ` 125 only and the tax was

levied ` 9 only, but actual cost of motorcycle was ` 46,839 and leviable tax should be

` 3,279. Similarly, the sale price of Maruti Swift (Four wheeler) shown in database

was ` 38,965 only and the tax was levied ` 2,728 only, but actual cost of the car was

` 3,93,984 and leviable tax should be ` 27,579. The actual cost of the vehicles was

based on the price of the same maker model entered in the database during that

period, which was also verified from some agencies.


29

district transport offices with database of sale/sale price of the dealers of

vehicles in its jurisdiction, this difference in cost price could not be detected.

Accordingly tax was calculated on reduced sale amount, which resulted in loss

of revenue of ` 13.75 lakh as detailed in Annexure-III.


information is being sought for from concerned DTOs.

2.4.10.2 Registration of vehicles in other districts after actual date of

purchase

Irregular registration of vehicles in other districts after actual date of

purchase and on reduced sale amount resulted in loss of revenue of

`̀̀̀ 8.11 lakh.

Section 40 of Motor Vehicles (MV) Act read with Rule 47 of CMV Rules

provides that an application for registration of a new vehicle shall be

submitted before the Registering Authority in whose jurisdiction the applicant

is residing or having his business and the vehicle is normally kept. The

application for registration shall be made in Form 20, within a period of seven

days from the date of delivery of such vehicle excluding the period of journey.

It shall be accompanied by necessary documents as per rules.

During verification of registration records of district transport offices Saran,

West Champaran and Rohtas, we observed that 52 owners of commercial

vehicles applied for registration between November 2011 and June 2014 and

the registration of these vehicles was still pending. On analysis of the data in

the VAHAN database of district transport offices, Vaishali, East Champaran

and Kaimur, we observed that the same 52 vehicles (as their chasis number

were same) were registered in these district transport offices. However, their

date of purchase was after the date of actual purchase and also at reduced sale

amount as depicted in earlier district transport offices. Thus, due to absence of

interconnectivity amongst the district transport offices, these 52 vehicles were

registered in another district transport offices on reduced sale amount and also

after its actual date of purchase. This resulted in loss of revenue of ` 8.11 lakh

as detailed in Table-2.3 below:

Table-2.3

Irregular registration of vehicles

Sl.

No

Name of the

District where

vehicles found

registered

No. of

vehicles

Period of registration Name of the

district where

previously applied

for registration

Amount

(` in

lakh)

1 East Champaran 9 between November

2011 and May 2013

West Champaran 1.41

2 Vaishali 36 between March

2013 and June 2014

Saran 6.33

3 Kaimur 7 between May 2012

and May 2014

Rohtas 0.37

52 8.11

On this being pointed out, the Department stated (October 2016) that the

matter would be looked into and further stated that detailed guidelines had


30

been issued (August 2016) to prevent tampering with VAHAN and SARATHI

database.

2.4.10.3 Plying of vehicles with same registration number

Vehicles bearing same registration number are plying in different places,

which is a serious security issue for law and order.

Section 46 of the MV Act provides that motor vehicle registered in any State

shall not require to be registered elsewhere in India and a Certificate of

Registration issued in respect of such vehicle shall be effective throughout

India.

On cross-verification of ‘owner table’ of VAHAN database of district transport

office, West Champaran with that of district transport office, East Champaran,

we observed (May 2016) that Registering Authority, East Champaran

assigned same registration mark to two vehicles in three cases. Out of which,

three vehicles were paying road tax in district transport office, West

Champaran whereas remaining three vehicles having same registration mark

were found entered in tax table of district transport office, East Champaran.

However, Chassis/Engine numbers in these cases were different as detailed in

Annexure-IV.

As system did not have the automatic validation control, vehicles bearing

same registration number were plying in different places. It is not only

violation of the codal provisions but also a serious security issue for law and

order.


information is being sought for from concerned DTOs.

2.4.10.4 Delivery of vehicles without temporary registration

Delivery of vehicles without temporary registration resulted in loss of

`̀̀̀ 17.66 lakh as fee and also a sum of `̀̀̀ 3.89 crore was not levied as fine.

Rule 42 of the CMV Rules provides that no dealer of vehicle can deliver the

unregistered motor vehicle to the purchaser. He can only deliver the vehicles

which are temporarily/permanently registered in the district transport offices.

Further, Section 39 of the MV Act provides that no owner of a motor vehicle

can allow or permit the use of unregistered vehicle and no person can drive a

motor vehicle, which is not registered. The delivery of motor vehicle to a

purchaser without registration either temporary or permanent, violates the

provisions of Section 39 of the Act ibid. The violation of the provisions of

Section 39 of the Act entail the consequences contemplated under Rule 44 of

the CMV Rules. Transport Department, Government of Bihar has already

issued an instruction (28 July 2009) in this context. Further, in case of not

complying the above provisions of the Act, a minimum fine of ` 2,000 shall

be levied under the provisions of Section 192 of the MV Act.

During scrutiny of registration records of VAHAN database in selected 12

district transport offices, we observed (between May and June 2016) that in

four district transport offices12

, 16 bona-fide dealers of two wheelers/four

12

Kaimur, Kishanganj, Rohtas and West Champaran.


31

wheelers delivered 19,447 vehicles to the purchasers between August 2005

and March 2016 without registration. The Registering Authorities concerned

issued registration mark to these motor vehicles which were delivered to the

purchasers without registration, whether temporary or permanent, in

contravention of the aforesaid rules. No action was taken by the Registering

Authorities concerned against these dealers for violation of the provisions of

the Act/Rules. Further, the owners of these vehicles were liable to pay fine

under Section 192 of the MV Act. Thus, there was a loss of revenue in shape

of temporary registration fee of ` 17.66 lakh and also fine of ` 3.89 crore was

not levied as detailed in Table-2.4 below:

Table-2.4

Delivery of vehicles without temporary registration (` ` ` ` in lakh)

Sl.

No

Name of the

District

No. of

dealer

Period of sale of

vehicles

Total no. of

registered

vehicles

Fee

and tax

due

Fine not

levied

1 West

Champaran

4 Between August 2005

and March 2016

138 0.12 2.76

2 Kaimur 2 Between April 2011

and February 2016

7,048 6.34 140.96

3 Rohtas 6 Between July 2013

and March 2016

4,801 4.49 96.02

4 Kishanganj 4 Between April 2015

and March 2016

7,460 6.71 149.20

Total 16 19,447 17.66 388.94


instruction had been issued to all DTOs for recovery of temporary registration

fee from dealers. DTOs were further instructed to ensure that in future no

dealer shall deliver the vehicle without registration, either temporary or

permanent, to prevent the plying of unregistered vehicles.

2.4.10.5 Registration of tractor without trailer as a transport

vehicle (Goods Carriage)

Due to registration of tractors without trailer as goods carriage

(transport vehicle), tax of `̀̀̀ 19.89 crore and permit fee of `̀̀̀ 6.72 crore

was not realised.

Section 2 of the MV Act provides that the tractor-trailer combination would

constitute a transport vehicle. Further, Section 66 of the Act ibid provides that

no owner of motor vehicles shall use or permit the use of the vehicle as a

transport vehicle in any public place without permit obtained from Regional

Transport Authority.

During scrutiny of registration records of VAHAN database of 12 district

transport offices13

we observed (between April and July 2016) that 46,806

13

Begusarai, Gaya, Kaimur, Katihar, Kishanganj, Nalanda, Patna, Purnea, Rohtas,

Saharsa, Vaishali and West Champaran.


32

commercial tractors were registered between April 2011 and March 2016. Out

of which, 32,797 commercial tractors were registered as goods carriage

without trailers. Thus, without registering 32,797 trailers and allowing those

tractors as goods carriage vehicles, tax of ` 19.89 crore and permit fee of

` 6.72 crore was not realised.

On this being pointed out, the Department stated (October 2016) that due to

registration of low number of trailers than the number of registered tractors,

the loss of revenue occurred. However, the rate of One Time Tax (OTT) had

been revised to 4.5 per cent (19 September 2014) of the cost of tractors for

tractor-trailer combination.

But, the fact remains that the Government was deprived of revenue in shape of

tax and permit fees by allowing tractors as goods carriage without trailer.

2.4.10.6 Dealer point registration

Allotment of registration mark out of sequence by the dealers without

charging additional fee led to short realisation fee of `̀̀̀ 53.10 lakh and

the dealers also deposited collected fee and taxes of `̀̀̀ 38.67 lakh with

delay ranging between 50 and 1,488 days.

As per directive issued by the Department (28 July 2009) registration number

shall be issued to the vehicles according to serial of their sale invoice. For any

other number out of the available numbers, dealers may allot number of choice

after charging additional fee of ` 5,000. Further, fees/taxes/documents

collected by dealers under dealer point registration shall be deposited next day

in the district transport offices concerned.

• On scrutiny of Dealer Point Registration in VAHAN database of 12

test-checked district transport offices, we observed (between May and July

2016) that in seven district transport offices 14

, 93 dealers had allotted 1,062

registration numbers (out of 1,17,416 registration numbers) out of sequence15

to the purchasers between November 2012 and March 2016 without charging

the prescribed fee. As a result, a sum of ` 53.10 lakh was not realised.


necessary instructions had been issued (September 2016) to all DTOs to issue

out of sequence registration number only after realising the prescribed fee. The

Department further stated that notices of demand had been issued by the

concerned DTOs and a sum of ` 1.20 lakh had also been recovered.

• During scrutiny of Dealer Point Registration in VAHAN database of 12

test-checked district transport offices, we observed (between June and July

2016) that in three district transport offices16

, 21 dealers had allotted 891

registration marks to new vehicles delivered to the purchasers. The registration

fee and tax of ` 38.67 lakh was collected from the owners of 891 vehicles, but

dealers deposited the collected amount with delays ranging from nearly two

months to over four years. Thus, dealers had temporarily misappropriated the

14 Begusarai, Gaya, Kaimur, Nalanda, Purnea, Vaishali and West Champaran. 15

In DTO Nalanda, BR 21 L 0989 was allotted on 30 March 2015 while subsequent

number BR 21 L 0990 was allotted on earlier date 24 March 2015. 16

Begusarai, Katihar and Purnea.


33

Government money. The Government was also deprived of interest which

may have accrued on that amount.


instruction had been issued to DTOs to deposit the revenue collected within 15

days.

Reply of the Department is not acceptable because as per the departmental

order (July 2009), the documents along with fees/tax has to be deposited in the

concerned district transport offices on the next working day, so that owners of

vehicle can collect certificate of registration within one week from the date of

purchase.


connectivity among district transport offices and dealers of vehicles to

ascertain registration of vehicles based on actual cost and date of

purchase of vehicle. Further, Government/Department should also ensure

that no vehicle shall ply without registration and initiate action against

errant official who allowed vehicles to ply without registration.

2.4.11 Issue of licences

2.4.11.1 Issue of driving licences without conducting test

Driving licences were issued to 3,188 applicants without conducting

driving test. However, SARATHI database indicated that the licences

were issued after passing the test which indicates that the database was

tampered with. This is fraught with the risk of accident and fatalities.

As per Rule 15 of the CMV Rules, no person shall appear for the test of

competence to drive unless the applicant has held a learner’s licence for a

period of at least 30 days. A person is granted the driving licence after

successfully passing the test of competence to drive.

During test-check of driving test register and information provided by five

district transport offices17

, we observed (May 2016) in district transport office

West Champaran, that 2,428 number of candidates were declared successful to

drive the vehicle of same category during the period July 2015 to March 2016

but 5,616 number of licences were issued to the applicants during the same

period. Thus, it is evident that 3,188 driving licences were issued to the

applicants without conducting test of competency to drive motor vehicles.

However, SARATHI database indicated that the licences were issued after

passing the test which indicates that the database was tampered with. Issue of

licences in such a way is also fraught with the risk of accidents and fatalities.


information is being sought for from DTO, West Champaran.

Recommendation-5: The Government/Department should ensure input of

correct data regarding conducting test of competency to drive motor

vehicle and results thereof and no licences are granted to drivers without

driving test.

17

Begusarai, Nalanda, Patna, Vaishali and West Champaran.


34

2.4.11.2 Excess realisation of driving licence fee

Driving licences were issued by realising an additional amount of `̀̀̀ 40,

which resulted in excess realisation of fee of `̀̀̀ 1.65 crore.

As per Rule 14 read with Rule 32 of the CMV Rules, 1989, the fee of ` 200

including the cost of computerised chip shall be charged for issuing the

driving licence in Form-7. It further stipulates that ` 50 for test of competence

to drive shall be charged. As per notification issued (October 1996) by the

Government of Bihar, surcharge of ` 50 shall also be charged on such test.

We observed during data analysis of SARATHI software in eight district

transport offices 18

that the all driving licenses (non-transport) were issued to

applicants by the licensing authorities in Form-7 during the period between

April 2011 and December 2015 by realising an additional amount of ` 40.

This resulted in excess realisation of fee of ` 1.65 crore as mentioned in

Table-2.5 below:

Table- 2.5

Excess realisation of driving licence fee (Amount in `̀̀̀)

Purpose Amount charged

by licensing

authorities

Amount

chargeable

as per rule

Total number of driving

licences (NT) issued

between April 2011 and

December 2015

Issue of driving

licence in form 7

200 200

4,11,275 For test of competence

to drive for each class

100 50+50

(surcharge)

Excess charges For one/two class

category ` 40

No fee

prescribed

Total excess realisation- 4,11,275X `̀̀̀ 40 1,64,51,000

Similar issue was pointed out in the Report of the Comptroller and Auditor

General of India (Revenue Receipts) for the year ended 31 March 2011 and

the Department accepted the audit observation. Despite this, excess realisation

of driving licence fee from applicants was still persisting.

On this being pointed out, the Department stated (October 2016) that matter

would be examined.

Reply of the Department was not acceptable because the then STC stated

(November 2011) that gazette notification would be issued in this regard.

2.4.11.3 Irregular grant of licences to driving schools

Seven licences of motor driving schools were granted irregularly by

Regional Transport Authority, Muzaffarpur.

Rule 24 of the CMV Rules provides that the licensing authority may, on

receipt of an application and after satisfying that the applicant has complied

with the requirements of sub-rule (3), grant or renew a licence for driving

schools. For the purpose of this rule, the State Government had declared

18

Gaya, Kaimur, Kishanganj, Nalanda, Purnea, Rohtas, Vaishali and West Champaran.


35

(December 1992) the District Magistrate as “licensing authority” under the

power conferred in Section 213 (1) of the MV Act.

During scrutiny of register of motor driving schools and relevant files in the

office of the RTA Muzaffarpur, we observed that licences were granted for

seven motor driving schools19

by the RTA during the year 2013 to 2015 (upto

October 2015), though the power for granting such licence is vested with the

District Magistrates concerned.

On this being pointed out, the Department accepted the audit observation and

instructed (September 2016) the concerned RTA to take post-facto approval

from the licensing authority.

2.4.12 Issue of permits

Section 66 of the MV Act 1988 provides that no owner of a motor vehicle

shall use or permit the use of the vehicle as a transport vehicle in any public

place whether or not such vehicle is actually carrying any passengers or goods

save in accordance with the conditions of a permit granted. A permit other

than a temporary permit issued under sub section (8) of Section 88 of the Act

ibid shall be effective for a period of five years.

2.4.12.1 Irregular grant of permits to light goods vehicles

Irregular realisation of permit fees of `̀̀̀ 15.25 lakh from light goods

vehicles in contravention of the provision of the Act.

As per Section 66 (3) (b) (i) of the MV Act, any transport vehicle used solely

for police, fire brigade or ambulance purposes and goods vehicle, the gross

vehicle weight (GVW) of which does not exceed 3,000 kgs shall be exempted

from necessity of permits.

During scrutiny of permanent permit register of selected two RTAs

(Muzaffarpur and Purnea), we observed that 744 permits were issued by

realising permit fee of ` 2,050 each during the period January 2015 to March

2016 to light goods vehicles, the gross vehicle weight of which did not exceed

3,000 kilograms, in contravention of the provision of the Act ibid. The

validity of such permits was granted for five years. This resulted in irregular

realisation of permit fees of ` 15.25 lakh as detailed in Table-2.6 below:

Table-2.6

Irregular grant of permit to light goods vehicles

Name of RTAs No. of

permit

granted

Permit issued

during the

period

Permit

fees

charged

Total permit

fees collected

Remarks

(Amount in `̀̀̀)

RTA,

Muzaffarpur

669 January 2015

to March 2015

2050

13,71,450

The LGV having

GVW upto 3000

Kgs is exempted

from permit as

per MV Act.

RTA, Purnea 75 January 2016

to March 2016

1,53,750

Total 744 15,25,200

19

Anand Motor Tranining Institute, Muzaffarpur; Jai Jagdish Motor Training Institute,

Hajipur; Krishna Motor Driving Training School, Raxaul; Om Motor Driving School,

Muzaffarpur; Rishabh Motor Training School, Hajipur; S.C. Motor Vehicle Training

School, Hajipur and Sri Ram Motor Vehicle Training, Bettiah.


36


compliance would be made in future, however there was no loss of revenue.

The facts remains that the Department collected permit fee without any

provision in the relevant Acts/Rules.

2.4.12.2 Plying of three wheelers

Vehicles were plying without obtaining requisite permit, as a result a sum

of `̀̀̀ 1.55 crore was not realised.

During scrutiny of registration records of three wheelers of VAHAN database

in four district transport offices20

and permit register in two RTAs (Patna and

Purnea), we observed that 5,453 three wheelers were registered between

September 2014 and March 2016. Out of which, only 595 permanent permits

were issued between September 2014 and March 2016. Thus, 4,858 three

wheelers did not obtain permanent permit. Thus, a sum of ` 77.73 lakh as

permit fees was not realised.

On this being pointed out, the Department stated (October 2016) that in cases

of vehicles plying without valid permit, Enforcement wing of the Department

imposed fines on the owner of the defaulting vehicles.

The fact, however, remains that the Enforcement wing could not adequately

inspect and identify all vehicles whose permit had expired and impose the

required fine.

2.4.12.3 Plying of tractor-trailer

During scrutiny of VAHAN database of four district transport offices21

and

permit register in RTAs (Patna and Purnea), we observed (June 2016) that

3,860 tractor-trailer combinations were registered between January 2013 and

March 2016 and paid taxes as goods carriages. Out of which owners of only

92 tractor-trailer combinations obtained permit from the authorities concerned.

Thus, 3,768 tractor-trailer combination were plying without obtaining

permanent permit, as a result a sum of ` 77.24 lakh as permit fee was not

realised.

On this being pointed out, the Department stated (October 2016) that in case

of vehicles plying without valid permit, Enforcement wing of the Department

imposed fines on the owner of the defaulting vehicles.

The fact, however, remains that the Enforcement wing could not adequately

inspect and identify all vehicles whose permit had expired and impose the

required fine.

2.4.12.4 Plying of educational institution buses

During cross verification of educational institution permit register of RTA,

Patna with registration records of VAHAN database in district transport office,

Patna, we observed that 186 buses were registered during July 2014 to

October 2015 in the name of various educational institutions in Patna. Out of

20

Kaimur, Nalanda, Purnea and Rohtas. 21

Kaimur, Katihar, Purnea and Rohtas.


37

these, only 149 buses had obtained permits. Further, out of remaining 37

buses, the owners of 15 buses had stopped payment of tax between August

2015 and October 2016. Thus a sum of ` 2.48 lakh (tax: ` 1.71 lakh and

permit fee: ` 0.78 lakh) was not realised.

On this being pointed out, RTA, Patna stated (August 2016) that matter would

be examined and suitable action would be taken.

As the Department failed to inter-link the database of offices of the District

Transport Officers with that of offices of Regional Transport Authorities, the

plying of 4,858 three wheelers, 3,768 tractor-trailer combination and 37 buses

of educational institution without valid permit remained undetected.


automation of permit issuance through VAHAN software by interlinking

database of district transport offices with that of Regional Transport

Authorities.

2.4.13 Levy of tax/fee

2.4.13.1 One-time tax and penalty not levied/short levied

In 10 district transport offices, the owners of 2,329 vehicles either did

not pay One Time Tax/penalty or paid it short. The taxing officer did

not impose the leviable One Time Tax/penalty amounting to

`̀̀̀ 3.77 crore.

Section 7 of the BMVT Act as amended by Bihar Finance Acts from time to

time provide rates of OTT on different class of vehicles. Delay in payment of

tax beyond 15 days attracts penalty from 25 per cent to twice the amount of

tax due as per the provisions of Section 23 of the Act ibid read with Rule 4 (2)

of BMVT Rules.

Further, Section 8 of the BMVT Act provides that when tax of a motor vehicle

has been revised, the owner of the vehicle shall pay to the taxing officer a

differential tax for the period for which the higher rate of tax is payable.

During data analysis of tax clearance table of the VAHAN database in

test-checked 12 district transport offices, we observed that in 10 district

transport offices22

, the owners of 2,329 vehicles either not paid OTT/penalty

or paid it short. The taxing officer did not impose the leviable OTT/penalty

and also did not issue notices of demand to realise the dues. Thus, OTT

amounting to ` 3.77 crore including penalty of ` 2.63 crore remained

unrealised as detailed in Annexure-V.

The following Charts depict the short realisation of OTT and penalty, OTT

and penalty not realised and differential tax not realised from the vehicles:

22 Begusarai, Kaimur, Katihar, Kishanganj, Nalanda, Patna, Purnea, Rohtas, Saharsa

and West Champaran.


38

Chart-2.4

Short realisation of OTT and penalty (`̀̀̀ in crore)


39

Chart-2.5

OTT and penalty not realised (`̀̀̀ in crore)

Chart-2.6

Differential tax not realised (`̀̀̀ in crore)


information is being obtained from concerned DTOs.

2.4.13.2 Incorrect levy of tax on construction equipment/

emergency vehicles

Due to incorrect levy of tax on 191 construction equipment/emergency

vehicles, a sum of `̀̀̀ 6.24 lakh was collected in excess.

As per Section 2 of the MV Act 'Ambulance' means vehicle specially

designed, constructed or modified and equipped and intended to be used for

emergency transportation of persons who are sick, injured, wounded or

otherwise incapacitated. The ambulance comes in category of emergency

vehicles. Further, as per rule 2 (ca) of the CMV Rules, excavator (JCB) and

loader is “construction equipment vehicle” and such vehicle shall be a


40

non-transport vehicle. Section 5 of BMVT Act read with the serial no. 7 of

Part C of Schedule-I provides levy of tax at prescribed rate on these vehicles.

During scrutiny of registration records and collection of tax in respect of

Ambulance and construction equipment vehicle in VAHAN software of two

district transport offices (Patna and Vaishali), we observed between February

and August 2016, that tax prescribed for taxi was being levied on ambulances

and tax prescribed for goods carriages was being levied on construction

equipment vehicles. Thus, due to incorrect levy of rate of tax, a sum of

` 6.24 lakh in excess was collected from 191 vehicles (ambulance, crane, JCB

and loaders).


instruction had been issued (September 2016) to levy of tax as per Section 5 of

the BMVT Act.

2.4.13.3 Short realisation of tax from stage carriages

A sum of `̀̀̀ 4.20 lakh was levied short due to incorrect classification of bus

in accordance with seating capacity.

As per the provisions of the Bihar Finance Act, 2014 (effective from 14

September 2014), the tax from stage carriage shall be calculated on basis of its

category (ordinary, semi deluxe and deluxe) and the number of seats for

passengers. The provision of the Act ibid further prescribes that number of

passenger in stage carriage is based on its wheel base and category of stage

carriage.

We observed during scrutiny of owners table of VAHAN software of 12

selected district transport offices that in three district transport offices23

, tax

was levied on 54 stage carriages on the basis of number of seat treating the

stage carriage under the ordinary category. But, number of seats of these stage

carriages were less than prescribed number of seats based on their wheel base.

This resulted in short levy of tax of ` 4.20 lakh.

On this being pointed out, the Department stated (October 2016) that notices

of demand for ` 2.94 lakh had since been issued by DTO, Nalanda, while

information was being sought for from the remaining DTOs.

2.4.13.4 Short realisation of trade certificates fees

Dealers of motor vehicles possessed 18,784 vehicles against the single

trade certificate. Thus, trade certificate fees of ` ` ` ` 11.06 lakh was not

realised.

Rule 33 of the CMV Rules provides that for the purpose of the proviso to

Section 39, a motor vehicle in possession of a dealer shall be exempted from

the necessity of registration subject to the condition that he obtains a trade

certificate from the registering authority having jurisdiction in the area in

which the dealer has his place of business. Further, under Rule 34 of the Rules

ibid, an application for the grant or renewal of a trade certificate shall be made

in Form 16 and shall be accompanied by the appropriate fee (Motor

23

Nalanda, Vaishali and West Champaran.


41

Cycle/Invalid carriage: 50 rupees for each vehicle; Others: 200 rupees for each

vehicle) as specified in Rule 81 of the CMV Rules.

During scrutiny of Trade Tax Register along with relevant files in district

transport office, Begusarai, we observed (July 2016) that trade certificates

were granted to 10 bonafide dealers. Out of which, files of four dealers were

scrutinised and we observed that the dealers had received 18,784 vehicles (two

wheelers:17,668; four wheelers:1,116) during the period January 2014 to

March 2016 against the single trade certificate as was evident from the

declaration filed by the dealers. Thus, trade certificate fees of ` 11.06 lakh24

was not realised.


information is being sought for from concerned DTO.

2.4.13.5 Short levy of fine on overloaded goods carriages

Short imposition of fine on overloaded goods carriages resulted in loss of

`̀̀̀ 3.79 lakh.

As per Section 194 of the MV Act, 1988, whoever drives a motor vehicle or

causes or allows a motor vehicle to be driven in contravention of the

provisions of Section 113, 114 or 115 of the Act ibid which provides limits of

weight and power to restrict the use of vehicles shall be punishable with

minimum fine of two thousand rupees and an additional amount of one

thousand rupees per tonne of excess load. Further, it stipulates that excess load

shall be off loaded at the cost of the transporter.

During scrutiny of seizure books and money receipts in the office of STC, we

observed (April 2016) that 15 Enforcement Officers seized 345 overloaded

goods vehicles during January 2011 to December 2015 but did not impose fine

in accordance with the overloaded quantity. This resulted in short levy of fine

of ` 3.79 lakh. Further off-loading of overloaded truck could not be

ascertained as documents were not provided to audit.

On this being pointed out, the Department stated (October2016) that reply

would be sent, however, District Magistrates were requested (September

2016) for arrangement of space to safe keep the offloaded goods.

2.4.13.6 Excess collection of OTT from agricultural tractors

Application of rate of tax prescribed for commercial tractors on 94

agricultural tractors resulted in excess collection of `̀̀̀ 1.29 lakh.

As per sub section (7) of section 7 of the Bihar Motor Vehicle Taxation Act

1994, the tractor and trailer used for transporting agricultural produce shall be

clubbed together for the purposes of OTT and tax shall be levied at the rate of

` 3,000 per tractor-trailer in case the tractor is upto 25 HP capacity and the

capacity of the trailer does not exceed 3 tonnes; and the rate shall be ` 5,000

24

Calculation: Two wheelers: 17,665 (17,668-3) x ` 50 = ` 8,83,250

Four wheelers:1,115 (1,116-1) x ` 200 = ` 2,23,000

Total: `̀̀̀ 11,06,250


42

per tractor-trailer in case where the tractor has more than 25 HP capacity and

the capacity of the trailer does not exceed 5 tonnes.

During scrutiny of owner table of VAHAN database in two district transport

offices (Kishanganj and West Champaran), we observed that out of 523

agricultural tractors registered between November 2012 and January 2016,

OTT was realised in excess from 94 tractors registered for agriculture purpose

due to levy of tax at the rate prescribed for commercial tractor (two per cent

from April 2013 and 4.5 per cent from September 2014 of the cost of the

vehicle). Thus, the taxing officer collected ` 1.29 lakh in excess from the

owners of 94 tractors.


information is being obtained from concerned DTOs.

Recommendation-7: The Government/Department should ensure timely

and correct mapping of provisions of rate of tax in VAHAN software,

discontinuance of manual issuance of tax receipts and generation of tax

receipts through VAHAN software only after due tax is paid.

2.4.14 Remittances of revenue into Government Account

2.4.14.1 Delayed remittance of revenue into Government Account

Collected fee of ` ` ` ` 10.10 crore was remitted to the Government Account

with delay ranging from two to 297 days.

Under the provisions of Rule 37 of the Bihar Financial (BF) Rules, it is the

duty of the Departmental Controlling Officers to see that all sums due to

Government are regularly and promptly assessed, realised and duly credited in

the Public Account. The fee and tax collected by the authorised bank during a

month is required to be remitted through treasury challan under head “0041-

Taxes on Vehicles” latest by the first week of the following month and the

amount collected in the month of March is to be transferred by the 31 March

positively so that all the sum collected in a financial year stand transferred to

the Government Account.

During scrutiny of the records of RTA, Muzaffarpur and district transport

office, Gaya, we observed that ` 10.10 crore collected as fee through

authorised banks during the period between October 2012 to March 2016 was

remitted to the Government Account with delays ranging from two days to 10

months.


instruction had been issued to transfer the collected revenue within 15 days.

The Department further stated that E-KUBER system for online deposit of

revenue in the Government account was under proposal.


43

2.4.14.2 Collected drafts not encashed

Five hundred ninety six bank drafts received from different

States/Regional Transport Authorities as permit fee were not encashed.

Under the provisions of the BF Rules, all transactions must be brought to

account without delay and money received should be credited forthwith to

Government account. Further as per notification of RBI effective from 1 April

2012, validity of cheques/drafts/pay orders/bankers cheques is three months

from the date of its issuance.

During cross verification of bank draft register with bank scroll in the office of

the STC, we observed (April 2016) that 596 numbers of bank drafts received

(between January and March 2015) from different States/RTAs as permit fees

were not deposited in bank for encashment till June 2015. As the time of three

months stipulated for encashment of these drafts elapsed by 30 June 2015,

these drafts become time barred and needed to be revalidated. Out of these,

149 bank drafts had money value of ` 2.48 lakh and money value of remaining

447 drafts was not found on record.

On this being pointed out, the Department stated (October 2016) that 11,409

drafts had lapsed which were sent to the concerned banks for revalidation. Out

of these, 134 bank drafts involving amount of ` 3.62 lakh had been deposited

in Government account.

In Paragraph 4.2.11.2 of the Report of the Comptroller and Auditor General of

India (Revenue Receipts) for the year ended 31 March 2009, it was

recommended that mechanism be prescribed for monitoring the disposal and

accounting of the bank drafts. However, this irregularity still persists.

Recommendation-8: The Government/Department should ensure strict

adherence of the provisions of the Bihar Financial Rules relating to

remittances of Government revenue into treasury.

2.4.15 Arrears of revenue

2.4.15.1 Arrears pending collection

The arrears increased by 11 per cent from ` ` ` ` 173.15 crore as on 1 April

2011 to ` ` ` ` 192.20 crore as on 31 March 2016.

The opening balance, demand raised, collection and revenue pending for

collection for the years 2011-12 to 2015-16 as reported by the Department is

as mentioned in Table-2.7 below :


44

Table-2.7

Arrears pending collection

(`̀̀̀ in crore)

Year

OB Addition Total Disposal Balance Percentage

of Disposal

No. of

Cases

Amount No. of

Cases

Amount No. of

Cases

Amount No. of

Cases

Amount No. of

Cases

Amount In terms of

amounts

2011-12 26301 173.15 1723 13.43 28024 186.58 220 1.39 27804 185.19 0.74

2012-13 27887 180.61 1735 7.83 29622 188.44 298 2.77 29324 185.67 1.47

2013-14 29295 187.27 681 10.96 29976 198.23 104 0.53 29872 197.70 0.26

2014-15 29458 191.33 155 1.88 29613 193.21 150 0.92 29463 192.29 0.47

2015-16 29397 191.57 46 93.07 29443 284.64 142 30.55 29301 192.20 0.48

(Source: Information furnished by the Transport Department.)

As is evident from the table that the figures of closing balance do not tally

with the figures of opening balance of following years, which put the veracity

of these figures in doubt. The arrears increased by 11 per cent from ` 173.15

crore as on 1 April 2011 to ` 192.20 crore as on 31 March 2016. The disposal

rate in terms of amount involved in arrear cases ranged between 0.26 per cent

and 1.47 per cent, which indicated poor recovery and lack of monitoring.


correspondence had been made with District Magistrates for speedy disposal

of certificate cases.

2.4.15.2 Revenue Recovery Certificate case

Entries of Register-9 was not compared with the Register-10 periodically

by the concerned officers. Further in 146 cases, an amount of ` ` ` ` 1.04 crore

for the period April 2010 to March 2015 was pending for realisation.

Under the provisions of Section 21 of the BMVT Act, any tax or penalty

remaining unpaid is recoverable as arrears of land revenue. Under the

provisions of the Bihar and Orissa Public Demands and Recovery (PDR) Act,

1914, the concerned officer sends proposals for initiating certificate

proceeding to the Certificate Officer and enters the details of such cases in

Register-9. These are in turn entered in Register-10 maintained by the

Certificate Officer for initiating certificate proceedings for realisation of

arrears. As per para 46 of the Board’s instructions under PDR Act, Register-9

is to be compared every month with the Register-10 of the Certificate Officer.

• Register-9 not compared with Register-10

During scrutiny of Register-9 in the office of six district transport officers25

,

we observed that entries of Register-9 was not compared with the Register-10

periodically by the concerned officers. As such, actual position of disposal of

certificate cases could not be ascertained from Register-9.

On this being pointed out, the Department stated (September 2016) that

instruction for reconciliation of Register-9 with 10 had been issued to all the

DTOs and RTAs.

25

Begusarai, Gaya, Katihar, Kishanganj, Vaishali and West Champaran.


45

• Certificate cases not initiated

During scrutiny of records pertaining to arrear of revenue in the office of the

two DTOs (Vaishali and West Champaran), we observed (February and May

2016) that 146 cases for the period April 2010 to March 2015, involving an

amount of ` 1.04 crore was pending for realisation. In none of the cases, the

revenue recovery certificate case in accordance with provision of Section 21

of the BMVT Act read with Section 5 and 6 of PDR Act, for recovery of

arrear of revenue, was found initiated on record.


instruction regarding entry of details of vehicle owners in VAHAN database

and timely issue of notices of demand to defaulters had been issued to DTOs

and RTAs.

Recommendation-9: The Government/Department should take effective

measures in coordination with the Certificate Officer for disposal of

pending certificate cases.

2.4.16 Man-power management

A large number of vacancies existed in the Department which affected the

collection of the revenue.

The cadre-wise sanctioned strength and men-in-position of the Department

(as on 31 March 2016) is as mentioned in Table-2.8 below:

Table-2.8

Sanction Strength and Person in Position

Sl.no. Name of the post Sanctioned

strength

Men-in-

position

Vacancy

(percentage in

bracket)

1. District Transport Officer 37 31 06 (16.21)

2. Assistant District Transport

Officer 14 02 12 (85.71)

3. Taxation Officer 06 01 05 (83.33)

4. Motor Vehicle Inspector 67 32 35 (52.23)

5. Enforcement Officer 10 0 10 (100)

6. Enforcement Inspector 25 02 23 (92)

7. Enforcement Sub-Inspector 61 41 20 (32.78)

8. Mobile Squad Constable 35 04 31 (88.57)

(Source: Information furnished by the Department)

It is evident from above table that large number of vacancies existed in the

cadre of Motor Vehicle Inspector, Assistant District Transport Officer,

Enforcement Officer, Enforcement Inspector and Taxation Officer, who are

mainly responsible for operational functions of the Department. This may

affect the collection of the revenue and checking of illegal plying of vehicle in

the state.

On this being pointed out, the Department stated (October 2016) that cadre

rules are being prepared.


46

2.4.17 Internal control mechanism

2.4.17.1 Internal Audit

Internal audit of the field offices of the Department was not conducted,

as a result the Department could not detect the deficiencies in its

functioning.

The Internal Audit (IA) of a Department is a vital arm of the Internal Control

Mechanism and is generally defined as the control of all controls to enable an

organisation to assure itself that the prescribed systems are functioning

reasonably well.

We noticed that there was no separate internal audit wing in the Transport

Department. The Finance Department (Audit Cell) works as the internal audit

department of the Transport Department. During the period between 2011-12

and 2015-16, the Finance Department did not conduct internal audit of the test

checked offices.


requisition for internal audit had been made (February 2016) to Finance

(Audit) and inspection by Finance Department would be conducted from next

audit cycle.

2.4.17.2 Absence of departmental manual

Required controls could not be exercised in absence of the manual in the

Department.

In order to ensure proper functioning of the various wings of the department, it

is essential that a departmental manual is prepared outlining the process

required to be followed by different levels of staff.

We observed that there was no such manual in the Department. In absence of

the manual in the Department, required controls could not be exercised by the

higher authorities.

On this being pointed out, the Department stated (September 2016) that usage

of VAHAN and SARATHI database restricted the necessity of manual.

However, it stated that relevant orders were being scrutinised in present

circumstances and accordingly decision would be taken in this context.

2.4.18 Conclusions

The Performance Audit revealed:

• cases of defalcation of revenue and cases of irregular registration due

to absence of validation checks and proper monitoring.

• licences of pollution testing stations were not renewed due to not

maintaining State-wise database by the STC.

• cases of irregular registration of vehicles and plying of vehicles

without valid permit due to lack of inter-connectivity amongst the district

transport offices and offices of Regional Transport Authorities.

• cases of incorrect levy of tax, short levy of one-time tax and penalty in

respect of personalised vehicles and commercial vehicles;


47

2.4.19 Summary of Recommendations

The Government/Department should ensure:

� periodic reconciliation of the revenue collection figures with the

accounts of the Accountant General (A&E) to ascertain the correct

accountal of realised revenue and credit to treasury.

� biometric password policy and necessary validation checks in the

VAHAN and SARATHI software to ensure data integrity and

server security and also connectivity among district transport

offices and dealers of vehicles to ascertain registration of vehicles

based on actual cost and date of purchase of vehicles. Further,

also ensure that no vehicle shall ply without registration and

initiate action against errant officials who allowed vehicles to ply

without registration.

� maintenance of a State-wise database of pollution testing stations

and also ensure that the tests conducted by them are authentic and

due procedure has been followed by the stations while issuing the

certificate. This would enable the Department to control the

vehicular pollution in Patna and in the State.

� input of correct data regarding conducting test of competency to

drive motor vehicle and results thereof and no licences are granted

to the drivers without driving test.

� automation of permit issuance through VAHAN software by

interlinking database of district transport offices with that of

Regional Transport Authorities.

� timely and correct mapping of provisions of rate of tax in VAHAN

software, discontinuance of manual issuance of tax receipts and

generation of tax receipts through VAHAN software only after due

tax is paid.

� strict adherence of the provisions of the Bihar Financial Rules

relating to remittances of Government revenue into treasury.

� effective measures in coordination with the Certificate Officer for

disposal of pending certificate cases.

2.5 Provisions of the Acts/Rules not complied

The provisions of the Bihar Motor Vehicles Taxation (BMVT) Act, 1994,

Motor Vehicles (MV) Act, 1988 and Rules made there under require levy and

payment of:

• taxes on motor vehicles/additional tax by the vehicle owners at the

appropriate rates;

• tax/additional tax in advance and within the prescribe period and

• penalty up to double the tax, if the tax is not paid within 90 days.

The provisions of the Acts/Rules in some cases as mentioned in paragraphs 2.6

to 2.10 were not complied which resulted in short levy, short realisation of tax,


48

fee etc. of ` 9.42 crore. There is need for the Government to improve the

internal control system so that such omissions can be prevented.

2.6 Motor vehicle taxes not realised

Due to absence of a mechanism for periodic review of the taxation

registers/tax clearance table of VAHAN database by the DTOs, motor

vehicle taxes of ` ` ` ` 2.82 crore was not realised in 17 district transport

offices.

Under Section 5 and 9 of the Bihar Motor Vehicles Taxation (BMVT) Act,

1994, motor vehicles tax is to be paid to the taxing officer in whose

jurisdiction the vehicle is registered. The vehicle owner can pay the tax to the

new taxing officer in case of change of residence/business, subject to the

production of No Objection Certificate (NOC) from the previous taxing

officer. Further, the taxing officer may exempt the vehicle owner from

payment of tax, if he is satisfied that the prescribed conditions have been

fulfilled by the vehicle owner. The District Transport Officers (DTOs) are

required to issue notices of demand to ensure timely realisation of tax.

Further, under Section 23 of the Act ibid read with Rule 4 (2) of the BMVT

Rules, 1994, not paying the tax beyond 90 days attracts penalty at the rate of

200 per cent of the tax due. Under Section 22 of the BMVT Act, if the tax or

penalty or both has not been paid in accordance with the provisions of the Act,

an officer not below the rank of Inspector of Motor Vehicles or any other

officer specially authorised by the State Transport Commissioner, may seize

the motor vehicles and detain it till the payment of tax.

We observed that the Government/Department did not install a mechanism for

periodic review of the taxation registers/tax clearance table of VAHAN

database by the DTOs and also did not prescribe a time frame within which

notices of demand are to be issued to the defaulting vehicle owners.

We scrutinised the taxation register of transport vehicles and the VAHAN

database/Tax clearance table of 29 district transport offices26

for the period

2014-15 and found (between January and December 2015) in 17 district

transport offices27

that out of 3,662 transport vehicles test-checked (total

number of registered transport vehicles: 51,010), the owners of 698 vehicles

did not pay tax of ` 94.22 lakh pertaining to the period between March 2011

and July 2015 within the due dates and the concerned DTOs neither seized the

defaulting vehicles nor issued notices of demand for realisation of the dues

from the defaulting vehicle owners. In none of the cases, change of addresses

of the owners or surrender of documents for securing exemption from

payment of tax was found on record. Thus, tax of ` 94.22 lakh and penalty of

26 Araria, Arwal, Aurangabad, Banka, Bhagalpur, Bhojpur (Ara), Darbhanga, East

Champaran, Gaya, Gopalganj, Jamui, Jehanabad, Katihar, Khagaria, Kishanganj,

Madhubani, Muzaffarpur, Nalanda, Patna, Purnea, Samastipur, Saran (Chapra),

Sasaram, Sheikhpura, Sheohar, Sitamarhi, Siwan, West Champaran and Vaishali

(Hajipur). 27 Arwal, Aurangabad, Banka, Bhagalpur, Bhojpur (Ara), Buxar, Darbhanga, East

Champaran, Gopalganj, Jamui, Jehanabad, Madhubani, Muzaffarpur, Saran (Chapra)

Sheikhpura, Sitamarhi and Siwan.


49

` 1.88 crore was not realised as detailed in Annexure-VI. This shows the

slackness of the DTOs towards the review of VAHAN database as well as

weak monitoring mechanism by higher authorities, though we have pointed

this out repeatedly in the previous years.

On this being pointed out, the Department intimated in May 2016 that in

respect of district transport office, Siwan a sum of ` 5.75 lakh had since been

recovered in 17 cases and notices of demand for ` 19.19 lakh to the remaining

vehicle owners had been issued while DTOs concerned of the remaining

districts stated between February and November 2015 that notices of demand

would be issued against vehicle owners for recovery of dues and necessary

action would be taken as per rules.

The matter was reported to the Government/Department between August 2015

and February 2016; we are yet to receive their reply (October 2016).

2.7 Short realisation of Trade Certificate Fee

The registering authorities did not ensure realisation of trade certificate

fees in respect of all motor vehicles in the possession of the dealers which

resulted in short realisation of Trade Certificate Fees of `̀̀̀ 1.30 crore.

Section 39 of the Motor Vehicle (MV) Act, 1988 provides that no person shall

drive any motor vehicle in any public place unless the vehicle is registered.

Further, Rule 33 of the Central Motor Vehicles (CMV) Rules, 1989 provides

that for the purpose of the proviso to Section 39, a motor vehicle in the

possession of a dealer shall be exempted from the necessity of registration

subject to the condition that he obtains a trade certificate from the Registering

Authority having jurisdiction in the area in which the dealer has his place of

business. Under Rule 34 of the Rules ibid, an application for the grant or

renewal of a trade certificate shall be made in Form 16 and shall be

accompanied by the appropriate fee (Motor Cycle/Invalid carriage: ` 50 for

each vehicle; Others: ` 200 for each vehicle) as specified in Rule 81 of the

CMV Rules.

Further, under Rule 37 of the CMV Rules, a trade certificate shall be in force

for a period of 12 months from the date of issue or renewal thereof and shall

be effective throughout India for the purposes specified under Rule 41 of the

Rules ibid.

We scrutinised the trade tax registers and files/registration records in VAHAN

database and statement submitted by the dealers regarding receipt of vehicles

of 29 district transport offices for the period 2014-15 and found (between

February and December 2015) in 12 district transport offices 28

that 180 trade

certificates were granted to test-checked 109 dealers of vehicles (out of 236

dealers) during the period between April 2012 and July 2015, though, these

dealers had received 2,04,759 vehicles during the period as evident from the

declarations filed by dealers in Form B2. Though the information regarding

number of vehicles in their possession was available to the Registering

Authority, they did not initiate action to raise demand for trade certificate fees

28

Aurangabad, Bhagalpur, Bhojpur (Ara), Darbhanga, East Champaran (Motihari),

Gopalganj, Jamui, Madhubani, Muzaffarpur, Saran (Chapra), Sitamarhi and Siwan.


50

against the defaulting dealers for the remaining 2,04,579 vehicles under their

possession as required under Rules ibid. Due to this omission there was short

realisation of trade certificate fee of ` 1.30 crore.

The matters were reported to the Government/Department between September

2015 and February 2016; we are yet to receive their reply (October 2016).

2.8 One Time Tax

2.8.1 One Time Tax and penalty not levied/short levied

In 15 district transport offices, the owners of 5,150 vehicles either did

not pay One Time Tax or paid it short. The taxing officer did not impose

the leviable One Time Tax/penalty amounting to `̀̀̀ 4.41 crore.

Section 5 read with section 7 of the BMVT Act as amended by Finance Acts

(2010, 2011, 2012, 2013 and 2014) provides different rates of One Time Tax

(OTT) for levy on personalised vehicles, tractors, maxi/cabs, three-wheelers

and light goods vehicles. Delay in payment of tax beyond 15 days attracts

penalty from 25 per cent to twice the amount of tax due as per the provisions

of Section 23 of the Act ibid read with Rule 4 (2) of BMVT Rules.

Further, as per Section 8 of the BMVT Act, when a motor vehicle, in respect

of which tax of any period has been paid, is revised during such period, the

owner of the vehicle shall pay to the taxing officer a differential tax of a sum

which is equal to the difference between the tax already paid and the tax which

becomes payable in respect of such vehicle for the period for which the higher

rate of tax is payable in consequence of the alteration.

We scrutinised the Tax Clearance Table of the VAHAN database of 29 district

transport offices between January and November 2015 and found that the tax

officers of 15 district transport offices 29

did not realise OTT of ` 4.41 crore

from the owners of 5,150 vehicles (tractor, three-wheelers, maxi/motor cabs

and light goods vehicles) out of 34,939 registered vehicles (all test-checked),

which were registered between May 2010 and July 2015, as shown in

Table-2.9 below:

29

Arwal, Aurangabad, Bhagalpur, Buxar, Darbhanga, East Champaran, Gopalganj,

Jamui, Jehanabad, Madhubani, Muzaffarpur, Saran, Sheikhpura, Sheohar and

Sitamarhi.


51

Table-2.9

One time tax and penalty not levied/short levied

Type of

vehicle

Number of

office

involved

Amount

of OTT/

penalty

(`̀̀̀ in

lakh)

Rate of OTT

applicable

Audit observation

Tractor

(commerci

al)

10 DTOs30

88.61 One per cent w.e.f.

9.4.2010;

Two per cent w.e.f.

1.4.2013 and 4.5

per cent w.e.f.

19.9.2014.

Out of 17,650 tractors registered between

May 2010 and July 2015, the owners of 147

tractors did not pay OTT and penalty of

` 87.75 lakh and in case of 16 tractors, OTT

and penalty was paid short by ` 0.86 lakh.

Nine DTOs31

50.22 - do - Out of 580 tractors registered between

September 2014 and February 2015, OTT

was realised from the owners of 410 tractors

at pre-revised rate due to delay in mapping of

the revised rate in the VAHAN. Thus,

differential tax of ` 50.22 lakh was not

realised.

Three

wheeler

Five DTOs32

22.01 ` 6,000 (for 10

years upto five

seat), ` 9,000 (for

15 years upto five

seat), ` 9,000 (for

10 years upto seven

seat), ` 13,500 (for

15 years upto seven

seat)

Out of 5,508 three-wheelers registered

between September 2011 and July 2015, the

owners of 74 three-wheelers did not pay

OTT and penalty of ` 22.01 lakh.

Four DTOs33

132.26 Out of 5,070 newly registered three-wheelers

registered between April 2013 and March

2015, 4,233 vehicles were granted validity

of registration for 10 years instead of 15

years, which resulted in short realisation of

` 1.32 crore.

Maxi/moto

r cabs

Eight DTOs34

121.96 Five per cent w.e.f.

1.4.2013 and seven

per cent w.e.f.

19.9.2014

Out of 2,254 Maxi/motor cabs registered

between January 2013 and June 2015, the

owners of 171 Maxi/motor cabs did not pay

OTT and penalty of ` 1.22 crore.

Two DTOs

(Bhagalpur

and

Darbhanga)

3.80 Out of 765 Maxi/motor cabs registered

between September 2014 and May 2015,

OTT was realised from the owners of 46

Maxi/motor cabs at pre-revised rate due to

delay in mapping of the revised rate in the

VAHAN. Thus, differential tax of ` 3.80

lakh was not realised.

30

Bhagalpur, Buxar, Darbhanga, East Champaran, Gopalganj, Jehanabad, Madhubani,

Muzaffarpur, Sheikhpura and Sheohar. 31

Arwal, Aurangabad, Bhagalpur, Darbhanga, Gopalganj, Madhubani, Muzaffarpur,

Saran and Sheikhpura. 32

Buxar, Darbhanga, East Champaran, Gopalganj and Muzaffarpur. 33

Aurangabad, Jamui, Sheikhpura and Sitamarhi. 34

Arwal, Bhagalpur, Darbhanga, East Champaran, Jamui, Muzaffarpur, Sheikhpura and

Sheohar.


52

Light

Goods

Vehicles

(LGV)

Five DTOs35

21.98 ` 7,700 (upto 1,000

kgs.GVW)

` 5,500 per 1,000

kgs for GVW

above 1,000kgs

and upto 3,000 kgs

w.e.f. 1 April 2011.

Out of 3,112 LGV (GVW upto 3,000 kgs)

registered between March 2011 and January

2015, the owners of 53 LGV did not pay

OTT and penalty of ` 21.98 lakh.

440.84 5,150 vehicles

One Time Tax and penalty not levied and short levied are depicted in the

following Charts:

Chart-2.7

One Time Tax and penalty not levied

35

Aurangabad, Darbhanga, East Champaran, Jehanabad and Sitamarhi.

0

2000

4000

6000

8000

10000

12000

14000

16000

18000

Registered

Vehicle

Defaulter

Vehicles

One Time Tax

and Penalty

Offices

Involved

2254

171 121.96 8

3112

53 21.98 5

5508

74 22.01 5

17650

163 88.61 10

Maxi/Cab Light Goods Vehicle Three Wheeler Tractor


53

Chart- 2.8

One Time Tax and penalty short levied

On this being pointed out, the DTOs concerned stated between February and

December 2015 that notices of demand would be issued.

The matter was reported to the Government/Department between September


2.8.2 Penalty for belated payment of OTT not realised

The District Tranport Officers did not realise penalty on belated payment

of one time tax of `̀̀̀ 42.89 lakh.

We scrutinised the Tax Clearance Table of the VAHAN database of 29 district

transport offices and found between March and December 2015 that the taxing

officers of four district transport offices 36

did not realise penalty of ` 42.89

lakh for delayed payment of OTT from the owners of 428 vehicles (tractor and

maxi/Motor cabs), out of 4,125 registered vehicles (all test-checked), which

were registered between May 2010 and August 2015, as shown in Table-2.10

below:

36

East Champaran, Muzaffarpur, Saran and Sheohar.

0

1000

2000

3000

4000

5000

6000

No. of Officesinvolved

No. ofregisteredvehicle

No. ofdefaultervehicles

One TimeTax and

Penalty (Rs.in lakh)

9 580

410

50.22

2 765

46 3.8

4

5070

4233

132.36

Tractor Maxi/Cab Three Wheeler


54

Table-2.10

Penalty for belated payment of OTT not levied

Type of

vehicles

Number

of

defaulter

Vehicles

Name of

offices

involved

Penalty

(` in

lakh)

Remarks

Tractor

(commercial)

264 DTOs East

Champaran

and Sheohar

11.88 Out of 2,618 vehicles registered

between May 2010 and January

2014, the owners of 264 vehicles

had paid OTT with delays

ranging between 17 and 437

days. But the DTOs did not

impose penalty of ` 11.88 lakh

for delayed payment of OTT.

Maxi/Motor

Cabs

164 DTOs

Muzaffarpur

and Saran

31.01 Out of 1,507 vehicles registered

between January 2014 and

August 2015, the owners of 164

vehicles had paid OTT with

delays ranging between 20 and

747 days. But the DTOs did not

impose penalty of ` 31.01 lakh

for delayed payment of OTT.

Total 428 42.89

Penalty for belated payment of OTT not levied is shown in following

Chart-2.9:

Chart-2.9

Penalty not levied on delayed deposit of One Time Tax

0

1000

2000

3000

Tractor Maxi/Cab

2 2

11.58 31.01

264 164

2618

1507

No. of Offices involved Penalty (Rs. in lakh)

No. of defaulter vehicles No. of registered vehicle


55

On this being pointed out, the DTOs concerned stated between September

2015 and February 2016 that notices of demand would be issued.

The matter was reported to the Government/Department between September


Government/Department should ensure departmental action against

wilful negligent District Transport Officers in cases where One Time Tax

were short levied.

2.9 Loss of revenue due to delivery of vehicles without temporary

registration

Delivery of vehicles to the purchasers without allocating temporary

registration mark resulted in loss of ` ` ` ` 33.70 lakh.

As per Rule 42 of CMV Rules, 1989, no holder of a trade certificate shall

deliver a motor vehicle to a purchaser without registration, whether temporary

or permanent. Further, Section 43 of the MV Act, 1988 provides that

notwithstanding anything contained in Section 40, the owner of a motor

vehicle may apply to any registering authority or other prescribed authority to

have the vehicle temporary registered in the prescribed manner and for the

issue in the prescribed manner of a temporary certificate of registration and a

temporary registration mark. The Department vide office order no. 3415 dated

28 July 2009 also made it clear that in accordance with the provision of

Section 43 of the MV Act, 1988, the registering authorities shall provide the

blocks of the temporary registration numbers to the dealer agencies on their

requisition.

We scrutinised the owner table/registration records of VAHAN database of 29

district transport offices for the period 2014-15 and found (between May and

August 2015) in three district transport offices 37

that 36,983 vehicles (Light

Motor Vehicles: 824 and two-wheelers: 36,159) were registered between April

2014 and March 2015 (all test checked) and the holders of trade certificates

had delivered all the vehicles to the purchasers without allocating temporary

registration mark during the period between April 2014 and March 2015. The

registering authorities (DTOs) registered the vehicles permanently without

ensuring the delivery of vehicles to the purchasers by the dealers with

temporary registration as required under the aforesaid provision of the

Act/Rules ibid and departmental order. This resulted in loss of ` 33.70 lakh.

On this being pointed out, DTOs concerned stated between June and August

2015 that necessary action would be taken as per Rules.

The matter was reported to the Government/Department between October and

November 2015; we are yet to receive their reply (October 2016).

37

Bhagalpur, Bhojpur (Ara) and Darbhanga.


56

2.10 Additional registration fee not realised

Due to allotment of registration numbers out of sequence to the

purchasers without realising additional registration fees for preferred

registration number, revenue of ` ` ` ` 11.40 lakh was not realised.

As per notification (June 2003) issued under the Bihar Motor Vehicles

Taxation (BMVT) Rules 1992, if an owner of a vehicle applies for a preferred

registration number out of sequence, an additional registration fee of ` 5,000

shall be chargeable. The Department also instructed (28 July 2009) to issue

registration number from the allotted block of registration numbers according

to the dealer's sale invoice in sequence.

During scrutiny of the Dealer Point Registration Register and VAHAN

database of two district transport offices (Buxar and East Champaran,

Motihari), we observed between January and March 2015 that seven dealers of

motor vehicles to whom registration mark were allotted under dealer point

registration had allotted 228 registration numbers out of sequence to the

purchasers (out of 25,348 vehicles registered and test-checked) for which

additional registration fees for preferred registration number were not realised.

The concerned DTOs did not initiate any action to realise the fee from the

dealer for issue of the preferred registration numbers. Thus, an additional fee

of ` 11.40 lakh was not realised as mentioned in the Table-2.11 below:

Table-2.11

Additional fee not realised (Amount in `̀̀̀)

Sl.

No.

Name of

the DTOs

No of

vehicles

registered

(all test-

checked)

No. of

defaulter

dealers

No. of vehicles

where

preferred

registration

numbers were

allotted

Period of sale Fee

payable at

the rate of

` ` ` ` 5000

per

vehicle

Fee

paid

Additional

fee not

realised

1. Buxar 7,856

2

98 February 2012

to March 2014

4,90,000 0 4,90,000

2. East

Champaran

17,492

5

130 January 2012

to April 2014

6,50,000 0 6,50,000

Total 25,348

7

228 11,40,000 0 11,40,000

On this being pointed out, DTO East Champaran stated in March 2015 that

notices of demand would be issued while DTO Buxar stated in February 2015

that necessary action would be taken as per rules.

The matter was reported to the Government/Department in October 2015; we

are yet to receive their reply (October 2016).

Chapter- II: Taxes on vehicles - CAG's website · The Bihar and Orissa Public Demand and Recovery...

Documents

Transcript of Chapter- II: Taxes on vehicles - CAG's website · The Bihar and Orissa Public Demand and Recovery...